It Depends: Determining the Best Location for Product Jobs

ByMark LaScolaNovember 07, 2018

You have a decision to make: where to locate product management and product marketing jobs in your structure. Which team and department will be the best location on the organizational chart? To answer that question, you first must understand what truly makes up structure.

Most leaders think structure is synonymous with an org chart. This is completely wrong. An orga chart is a management tool that tells you who reports to whom, the number of employees and layers in a business, and nothing more. It is not structure.

What Structure Is

Structure is made up of six critical elements that, when combined, determine what work will be done, where and by whom, the location of power in the business, the fundamental shape and how it all sticks together. Structure consists of the following:

Work in boundaries

Departmentalization

Specialization

Shape

Distribution of power

Integrating and coordinating mechanisms

This article will focus on four of the elements: work in boundaries, departmentalization, specialization, and integrating and coordinating mechanisms, as they are key in determining the structural location, role and job within a business.

Work in Boundaries

Bounding or grouping work together is the DNA for structure in any business. Most leaders completely miss this step, seduced instead into focusing on people over more fundamental and core decisions. But this is THE most critical part of structure. If this step is missed then you’ve missed the boat, because this is where real change happens. The wisdoms here are twofold: First and foremost, it’s all about the work that creates real value for the customer. The second important wisdom is, “We don’t care about jobs or people.” While it sounds insensitive, it is key. Skipping this step and not applying these wisdoms is in fact one of the main reasons a business can make lots of superficial change without ever changing.

As you bound work, remember the more boundaries that are put around the end-to-end value stream, the more fragmented the value stream becomes. This in turn drives significant costs into your operating model. These costs are driven by overspecialization of jobs, compounded by the increased need to coordinate and integrate work across all the boundaries. It is quite common to find people spending more time and effort in coordinating/integrating meetings than doing real work.

The following diagrams illustrate how the insertion of departmental boundaries fragments an end-to-end value stream and exponentially increases the need for integration and coordination of work.

Diagram 1 – Value Stream of Work Within a Single Boundary

Diagram 2 – Value Stream Fragmented by Functional Boundaries

ON THE MARK conservatively estimates that additional costs resulting from value-stream fragmentation range from 10 to 25 percent of current operating costs.

So, the first thing you must consider to address the structural location of a product marketing or product manager job is where the work resides and in which boundary.

Departmentalization

Departmentalization is a decision about how to organize people around work within the boundaries. It is one of the more significant decisions and must directly align and reinforce your business strategy and competitive difference. While there are a variety of ways to departmentalize, leaders tend to default to functional departmentalization because it’s the only thing they know. The six departmentalization choices are shown in the chart.

The good news is that each disadvantage can be mitigated by implementing other roles, mechanisms and processes.

Each departmentalization choice described in the chart fits better with different competitive positions. Case in point: Apple competes mostly on a product leadership competitive difference. To gain and keep its competitive advantage, Apple maintains deep expertise in various technology areas such as screens, cameras, memory, etc. Its teams are most likely functionally organized to cultivate and innovate this deep expertise. On the other hand, consider a luxury retailer focused on its competitive difference of customer intimacy. Here the commercial-facing part of the business may be organized around a kind of customer segmentation.

The structural location of product jobs will differ depending on the departmentalization choice you make overall as an organization. For example, in a functionally organized business, this job might reside in the marketing department. However, in a customer-organized business, it might be located in a customer-facing segment because that’s where the work is done. Remember, it should always be about the work to be done, the boundaries placed around that work and the departmentalization choice.

Specialization

Many businesses are overspecialized: They hire one person to do a job that only that person can do. The consequence is that progressing work will be based entirely on that one person’s productivity and performance. Imagine what happens when they go on vacation!

A viable alternative to one person/one-job is to organize multi-functioning units and teams around whole work. This setup ensures that no one focuses only on their specialty. Instead, team members cross-train each other, which allows them to more effectively cope with the ebb and flow of work demand.

Consider what happens when you have a product specialist located in a functionally organized business, especially when they are working at peak demand. Now, consider the responsiveness possible with a cross-functional team that has deep product knowledge combined with other skills.

Integrating and Coordinating Mechanisms

In any operating model, it is normal to separate work and people into specialties, functions and departments. Each time a unit or department is put in place, it should be glued to other units, especially when work and decisions are interdependent. These integrating and coordinating mechanisms can be a combination of meetings, processes, procedures, governance, measures, technologies and roles that are implemented to lubricate and glue work, people and decisions together across the value stream.

There are two types of glue: vertical and horizontal. Vertical glue connects strategy to day-to-day operations, ensuring a common focus and alignment. Horizontal glue connects customer needs with the consistent and accurate delivery of results, including work, people, decisions and units along the end-to-end value stream. Both are necessary to make a business work.

Failing to use appropriate glue will open up a business to significant risks, including:

Errors and waste across the value stream, resulting in poor-quality outputs to the customer

Rework and workarounds, resulting in increased cost and cycle times

Cross-boundary conflict and finger-pointing associated with roles and responsibilities

Escalating issues to management rather than resolving them where the work is done

Of course, the product group will always want to own its resources, but in the absence of having the product marketer or manager report directly to the product line, an alternative is to ensure that most of their objectives and performance reviews are based on the product line performance they support. Another option is to physically co-locate them with the product line they represent so they sit with that product team and participate in their meetings. Finally, you can provide a dotted-line reporting relationship with the product leader. Each of these actions will provide lubricant and glue to ensure that cross-boundary jobs are appropriately aligned.

In Closing

In the end, determining the structural location of any job depends on the business’s strategy and competitive difference. It’s important to focus on the core work—and the boundaries around that work—that creates value for the customer. In addition, the departmentalization choices must directly align with the competitive advantage. Finally, consider the degree of specialization that works best for your business. Regardless of the structural location you choose, make sure to apply sufficient lubricant and glue to those boundaries. Following these steps will help you determine the optimal structural location of any job.

Mark LaScola

Mark LaScola is the founder and managing principal of ON THE MARK, the leading global boutique consultancy offering practical, collaborative organization design solutions to modernize operating models. With over 400 redesigns completed cross-industry and on five continents, the company offers C-level executives a proven and reliable alternative to modernizing operating models based on the engagement of real people from start to finish. Send your comments and questions to Mark at mlascola@on-the-mark.com.